Every science-based target begins with a brutal question: what emissions are we actually legally committing to reduce? Before assessing ambition, the SBTi must confirm that the target governs the correct corporate entity, the right greenhouse gases, and the exact required scopes. Getting the boundary wrong is the absolute most common reason targets violently fail validation.
Organizational Boundary (C1)
Criterion C1 legally mandates that companies submit targets strictly at the parent or group level.
A massive multinational corporation absolutely cannot submit a target covering only its easiest European operations while hiding its dirty manufacturing subsidiaries. The target must ruthlessly encompass the entire consolidated entity. Brands, specific regions, or individual divisions are completely unacceptable as standalone targets unless they exist entirely outside the parent's financial consolidation boundary.
R1 (Setting boundaries): The SBTi strongly recommends aggressively aligning your GHG organizational boundary perfectly with your financial accounting boundary.
Think of the organizational boundary exactly like a consolidated financial statement. A parent company cannot legally publish group-level financials that suspiciously exclude a massive, highly profitable subsidiary. The exact same logic governs GHG boundaries: if a subsidiary sits inside your financial consolidation, its emissions absolutely belong in your climate target.
GHG Coverage (C2)
C2 demands that targets aggressively cover all relevant emissions across the seven major greenhouse gases required by the GHG Protocol:
- Carbon dioxide (CO2)
- Methane (CH4)
- Nitrous oxide (N2O)
- Hydrofluorocarbons (HFCs)
- Perfluorocarbons (PFCs)
- Sulfur hexafluoride (SF6)
- Nitrogen trifluoride (NF3)
A company cannot target CO2 alone and conveniently ignore massive fugitive methane leaks from its natural gas operations.
Scope Coverage (C3 & C4)
Scope 1 and 2 are always required (C3). There is absolutely no opt-out. Targets must mathematically cover company-wide Scope 1 (direct combustion) and Scope 2 (purchased electricity).
When Scope 3 Becomes Mandatory (C4). The SBTi enforces a brutal materiality threshold. If a company's Scope 3 emissions represent 40% or more of its total footprint, then setting aggressive Scope 3 targets becomes legally mandatory. For most global corporations, Scope 3 easily smashes this 40% threshold.
Fossil fuel sellers face an incredibly strict unconditional rule. Any company selling or distributing natural gas or other fossil fuels absolutely must set targets for the use of sold products (Scope 3 Category 11), regardless of the 40% threshold.
Allowable Exclusions (C5)
No massive global inventory is utterly flawless. The SBTi recognizes extreme data collection limits and allows a highly restricted exemption under C5:
- Companies may exclude a maximum of 5% of combined Scope 1 and 2 emissions.
- Companies may exclude a maximum of 5% of Scope 3 emissions.
You absolutely cannot exclude 5% from the inventory boundary and then suspiciously exclude another 5% from the target boundary. The 5% cap is the absolute maximum combined exclusion.
Scope 3 Target Coverage (C6)
When Scope 3 targets become mandatory under C4, Criterion C6 aggressively dictates exactly how comprehensive those targets must be.
A company must define emission reduction targets or supplier engagement targets that collectively conquer at least 67% of total reported Scope 3 emissions. A company whose Scope 3 targets only cover 50% of its massive supply chain will instantly fail validation.
Applying C6 in Practice A massive retail company calculates its total Scope 3 emissions at 1,000,000 tCO2e. To survive C6, its combined targets must conquer at least 670,000 tCO2e (67%).
The company sets an absolute reduction target targeting purchased goods covering 500,000 tCO2e (50%). It then sets a fierce supplier engagement target covering upstream transportation accounting for 200,000 tCO2e (20%). The combined coverage hits 70%. The company successfully passes C6.
Summary of Boundary Criteria
| Criterion | Brutal Rule | Key Metric |
|---|---|---|
| C1 | Target must be at parent level. | All subsidiaries |
| C2 | Guarantee coverage of all 7 GHGs. | 7 gases |
| C3 | Scope 1 and 2 are absolutely mandatory. | 100% of S1+2 |
| C4 | Scope 3 mandatory if it hits the massive threshold. | 40% threshold |
| C5 | Maximum allowed blindspot for missing data. | 5% cap |
| C6 | Minimal structural coverage for Scope 3 targets. | 67% threshold |
Key Takeaways
- 1Targets must be set at the parent or group level (C1) - individual divisions or regions cannot submit standalone targets
- 2All seven GHG Protocol gases must be covered (C2) - targeting only CO2 while ignoring methane or other gases fails validation
- 3Scope 3 targets become mandatory when Scope 3 represents 40% or more of the total corporate footprint (C4)
- 4Companies may exclude a maximum of 5% of Scope 1+2 and 5% of Scope 3 emissions for data gaps (C5)
- 5Scope 3 targets must collectively cover at least 67% of total reported Scope 3 emissions (C6)
- 6Fossil fuel sellers must always set Scope 3 Category 11 targets regardless of the 40% threshold